You sold 40 orders this month, and the sales number looks great. Then you check your bank balance and wonder where it all went.

Sales are not profit. Between the price on your listing and the money you actually keep sits a trail of small costs: the discount code, the free delivery, the packaging, the COD fee, the parcel that came back, the ad that brought the customer in. None of them looks big on its own. Together they can eat most of your margin.

This post follows one ₹799 order from listing price to real profit. The numbers are illustrative, so swap in your own as you read.

The order

A seller sells a cotton kurta set for ₹799 on Instagram. A customer in Kochi orders it with cash on delivery, using a ₹50 welcome coupon. Here is what that order costs the seller:

• Cost price from the supplier: ₹380 -** Packaging (cover, box, tag, tape, thank-you card):** ₹25
• Delivery you pay for (free delivery above ₹699): ₹60
• COD handling fee: ₹30
• Allowance for refused or returned parcels: about ₹15 per order. This assumes 1 in 10 parcels comes back, and each one costs ₹145 in two-way delivery and lost packaging.
• Ad spend to win this order: ₹100

What you think you made

Most sellers do this sum in their head: ₹799 selling price minus ₹380 cost price is ₹419. That looks like a margin of about 52%, and it feels like a very good business.

What you actually made Now follow the money step by step:

• The customer pays ₹749 (₹799 minus the ₹50 coupon)
• After the cost price (₹380), ₹369 is left
• After packaging (₹25), ₹344 is left
• After delivery (₹60), ₹284 is left
• After the COD fee (₹30), ₹254 is left
• After the returns allowance (₹15), ₹239 is left
• After the ad spend (₹100), ₹139 is left

The real profit is ₹139, about 17% of the listed price. The ₹280 gap between the ₹419 you imagined and the ₹139 you made is the coupon (₹50), packaging (₹25), delivery (₹60), the COD fee (₹30), returns (₹15) and ads (₹100). Not one of those costs appears in the price you gave your supplier.

One returned parcel costs more than you think

Suppose this same parcel is refused at the door. You pay ₹60 for delivery out and ₹60 for the return, lose ₹25 of packaging, and the ₹100 you spent on ads is already gone. That is about ₹245 for one failed order, which is almost two good orders’ worth of profit (₹139 each). And this assumes the product comes back in a condition you can resell. If it’s damaged, add the cost price on top.

COD makes this risk bigger, because the customer hasn’t paid anything before the parcel ships. If 3 in 10 of your COD parcels came back instead of 1 in 10, the returns allowance would rise from about ₹15 to about ₹44 per order, and your profit would fall from ₹139 to about ₹110.

What moves the number

Starting from ₹139, here is what each change would do on its own:

• Drop the coupon: +₹50, so ₹189
• Raise the price by ₹50 to ₹849: +₹50, so ₹189
• Cut the ad cost per order from ₹100 to ₹70: +₹30, so ₹169
• Save ₹10 on packaging: +₹10, so ₹149
• Charge ₹60 delivery instead of offering it free: +₹60, so ₹199, though it may cost you some orders

Notice that the biggest levers are price, discounts, ads and delivery. Squeezing your supplier by ₹20 helps far less than most sellers expect.

Work out a floor price

A floor price stops you discounting yourself into a loss. The formula is:

Minimum selling price = total cost to you ÷ (1 − the margin you want)

In this example, the costs you carry on every order (cost price, packaging, delivery, COD fee, returns allowance and ads) add up to ₹610. To keep a 25% margin on what the customer actually pays, divide ₹610 by 0.75, which gives about ₹813. If you also give a ₹50 coupon, your list price needs to be about ₹865, not ₹799. At ₹865, the customer pays ₹815 after the coupon, and you keep ₹205, which is about 25%.

The costs most sellers forget

1.Discounts and coupons. Every code comes straight off your profit.

2. **Free Delivery.**It’s only free for the customer.

3. Packaging. Covers, boxes, tape, tags and inserts add up quickly across hundreds of parcels.

4. Payment and COD fees. Small per order, large per month.

5.Returns and failed deliveries. You pay for the trip out, the trip back and the damaged stock.

6. Ad spend per order. Divide a month’s ad spend by the number of orders to see it.

7. Replacements and freebies. Samples, gifts and resent parcels are costs even when nobody bills you for them.

8. verheads. Rent, phone, tools, helpers and your own time need a share in every order.

9.Stock that never sells. Money tied up in slow items is profit you haven’t made yet.

Work out your own number in an afternoon

1. Pick your three best-selling products.

2. Write down the real cost price of each from your supplier bills, including transport to you.

3. Add the packaging you use for one parcel.

4. Divide last month’s ad spend by the number of orders you got.

5. Add the delivery you paid for, the COD and payment fees, and count how many parcels came back.

6. Subtract all of it from what customers actually paid after discounts.

7. Do the same every month, because costs creep up without anyone announcing it.

Why a notebook can’t do this for you

Doing this sum once is easy. Doing it for every product and every order, month after month, is where notebooks and spreadsheets give up.

Ordello keeps the pieces in one place so the profit figure is built from your real records, not guesses. Sales by day, your best sellers and best customers, and every product and variant, including what sold, what came back and what didn’t sell at all, are in your reports. On the Pro plan you also get profit and loss and profit per product, with purchases, expenses and returns taken off. Alongside that:

1. Purchases, suppliers and expenses record what you bought, from whom and at what cost, along with your running costs.

2. Returns and exchanges are recorded once, so the books correct themselves.

3. COD cash shows exactly how much each rider is carrying.

4. Coupons are tracked per order, so you can see what each code really cost you.

5. Staff logins can hide your margins from helpers.

6. PDF reports for your accountant, and your product list in Excel.

Wrapping Up: From Revenue to Real Take-Home

Trackingyour top-line sales is exciting, but profit is what keeps the doors open. As the ₹799 order illustrates, small, unnoticed leaks—coupons, shipping, return allowances, COD charges, and ad spend—can quickly compress a perceived 52% margin down to a 17% reality.

To protect your bottom line moving forward:

**.**Know your true floor price before running discounts or promotions.

**.**Account for return rates and COD costs directly in your unit economics.

**.**Audit per-order expenses regularly, rather than calculating margin from supplier cost alone.

When you base business decisions on exact net numbers rather than gross revenue, scaling up actually translates to higher take-home pay.